Work is due to begin in late February or early March and will take eight years to complete. Funds worth three billion rupees (£19m) have been allocated, he said.

Abbottabad, a quiet, leafy town in the foothills of the Himalayas around 50km (30 miles) north of the capital Islamabad, has long been a popular spot for wealthier families to spend weekends away.

The town also houses Pakistan's elite military academy and the discovery of the world's most-wanted man on its doorstep prompted allegations of incompetence or complicity between the armed forces and the 9/11 mastermind.

But Mr Shah insisted the new development was simply about promoting tourism, not polishing the town's tarnished image.

"This project has nothing to do with Osama bin Laden.

"We are working to promote tourism and amusement facilities in the whole province and this project is one of those facilities," he said.

The authorities demolished the compound where bin Laden hid with his wives and children last February, fearing it could become a shrine to al Qaeda followers.